Auditing IX?

Question

Folks,

Need help for mc auditing questions. Thx.

1.Auditors count investment securities held by the client primarily to test the ASB balance assertion of

a. Existence

b. Rights and obligations

c. Completeness

d. Valuation

2. In Case 10.4 (No Treasure in this Treasure Planet), Disney overvalued net assets by capitalizing unrecoverable production costs. The lesson for the auditors in this case was:

a. Always recalculate the client's figures, regardless of how simple they appear

b. Maintain professional skepticism when evaluating clients' estimates

c. Always look into the background of the client before accepting an engagement

d. None of the above

3.Tests of controls in the finance and investment cycle.

a. Normally focus on tests of transactions

b. Primarily involve observing physical security of assets

c. Amount to inquiries and observations related to management involvement

d. Can significantly reduce the extent of substantive test

Answer 1

1.Auditors count investment securities held by the client primarily to test the ASB balance assertion of

a. Existence

2. In Case 10.4 (No Treasure in this Treasure Planet), Disney overvalued net assets by capitalizing unrecoverable production costs. The lesson for the auditors in this case was:

b. Maintain professional skepticism when evaluating clients' estimates

3.Tests of controls in the finance and investment cycle.

d. Can significantly reduce the extent of substantive test